Question

Hi,
why does FCFF=EBIT(1-t)-Reinvestment?
isn't the FCFF supposed to include the reinvestment?

Answer 1

No, FCFF is the money after expenses and reinvestments.

Answer 2

FFCF is what is left over from after-tax EBIT after meeting reinvestment needs meaning net capex (capex-depreciation) and change in non cash working capital.

Answer 3

thanks, so the difference between FCFF and FCFE is only the interest, right?

Answer 4

All esle being equal, do not forget net debt repayments (debt repayments - new debt).